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Profiles of Angel Investors and Groups

As a complement to Inc. magazine's July 2005 feature "Angels With Angles,"* Inc.com shares sixteen more profiles of angel investors, groups and firms, and what they're investing in.
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Looking for some cash? Inc.com spotlights 16 angel investors, groups, and firms, sharing information on who they are, what companies they've invested in, and what they're looking for in their next investment.

California

Band of Angels
Menlo Park
www.bandangels.com
Founded 1994
Members: 110
Total amount invested: $110 million
Number of companies funded: 151
Who got money: Vapore

The oldest of the Silicon Valley groups is comprised of founders and former senior officers of high tech firms--the group is almost exclusively interested in tech firms in the Bay area. A recent investment is Vapore, which has a new means of vaporizing liquids that could be used in air purification, drug delivery, and fuel cells. Band of Angels members and the Band of Angels Venture Fund, run by managing director Ian Sobieski, led a $2 million seed round in March of last year, together contributing $500,000. While the Band does accept unsolicited submissions via its Web site, it prefers that entrepreneurs have some connection to a member. The staff sees about 50 qualified plans a month, which get whittled down to six firms that present to a pre-screening committee. The committee selects three of those to do 20-minute presentations at monthly meetings; generally one of those will get funding.

The Angels' Forum
Palo Alto
www.angelsforum.com
(Read the full profile in the July 2005 issue of Inc. magazine.)

Tech Coast Angels
Los Angeles, Orange County, San Diego, Santa Barbara/Westlake
www.techcoastangels.com
Founded 1997
Members: 250
Total amount invested: $55 million
Number of companies funded: 85
Who got money: CaseStack

The four networks of this group all operate in the same way: A small group of members looks at all applications, which are submitted via an online template. The best three or four are selected to present at screening meetings, which happen every three weeks, and individual members schedule meetings with firms from then on to complete deals. Last year Tech Coast Angels added the Seraphim Fund, which puts additional money into any deals that have at least $350,000 from 10 members or more, and where a member has a board seat. CaseStack, which received $457,000 from 20 members in December 2002, combines transportation, warehousing and software to consolidate shipments from small suppliers to major retailers such as Wal-Mart. The following July the firm received a VC-led B round of $3.6 million. The group encourages those it has turned down to try again once they've corrected the issues raised.

New England

CommonAngels
Lexington, Massachusetts
www.commonangels.com
(Read the full profile in the July 2005 issue of Inc. magazine)

Angel Healthcare Investors
Newton, Massachusetts
www.hcangels.com
Founded 1999
Members: 45
Total amount invested: $13 million
Number of companies funded: 29
Who got money: TyRx Pharma

This group's ability to leverage its deals is impressive: Companies it has invested in have received a total of $500 million, mostly from VCs in later rounds. Some deals have involved biotechs who need lots of money, but director Geoff Maletta says medical device firms are attractive, because they often just need a few million, which can lead to a pretty swift exit with a modest but probable return of two or three times the investment. In 2002 and 2004, 23 members invested about $500,000 in TyRx Pharma, which is developing and commercializing a technology for coating medical devices such as stents with biodegradable polymers that can slowly and safely secrete drugs into patients' systems. TyRx plans to sell devices with the coating in place -- these types of "combination" products are hot in the medical device industry now. No exit yet, but TyRx has received more than $2 million from other sources and has a partnership with Boston Scientific.

New York

New York Angels
www.newyorkangels.com
(Read the full profile in the July 2005 issue of Inc. magazine)

Silicon Alley Venture Partners
www.savp.com
(Read the full profile in the July 2005 issue of Inc. magazine)

Mid-Atlantic

Robin Hood Ventures
Wayne, Pennsylvania
www.robinhoodventures.com
Founded 1999
Members: 27
Total amount invested: Over $8 million
Number of companies funded: 14
Who got money: Intellifit

Rob Weber and George Marks co-founded this group. It was George's idea to name it after Rob, real name Robin, who hated the name at first. Any type of business in the Philadelphia area is fair game. Applicants are asked to review all of the members' biographies on the Web site, and identify which member's experience best matches their business. Those that make the executive director's initial cut will try to get that member to sponsor their company. If the member is interested, he'll conduct the initial due diligence, and pitch the company to the entire group. Should a deal get done, the sponsoring member typically will get a seat on the board. The group has put about a million dollars in several rounds into Intellifit, which has developed a 3-D means of taking accurate measurements of people while fully clothed; the system can then suggest specific brands, styles, and sizes that will best compliment the clothes shopper.

Walker Ventures
Glenwood, Maryland
www.stevewalker.com
Founded 1998
Two managing partners, one other principal, three more on staff
Total amount invested: $60 million
Number of companies funded: 30-35
Who got money: Bluefire Security Technologies

Most angels and early-stage VCs will tell you that they invest in management and in businesses, not in technologies, but this venture capital firm is an exception. Managing partners Steve Walker and Gina Dubbe are happy to take the hand of entrepreneurs with promising technology and not much business experience and help them build a company. That's what they've done with portfolio firm Bluefire Security Technologies, which develops security for mobile wireless devices. And for two years, without yet making an investment, they've been nurturing a University of Maryland professor who hopes to keep Moore's Law on track by putting thousands of processors on a single chip. He's almost ready for funding. Walker typically makes investments of $250,000 to $1 million. Investments are usually matched two-to-one with the federal government's Small Business Investment Corporation (SBIC) program.

Washington Dinner Club/Dinner Club IV
Vienna, Virginia
www.washingtondinnerclub.com
(Read the full profile in the July 2005 of Inc. magazine)

Southeast

Piedmont Angel Network
Greensboro, North Carolina
www.piedmontangelnetwork.com
Founded 2001
Members: 80
Total amount invested: $3 million
Number of companies funded: 9
Who got money: Optivia Medical

Piedmont Fund Executive Lou Anne Flanders-Stec has emerged as a leader in fostering best practices for angel groups, says Angel Capital Association chairman James Geshwiler. Her group raised a $4.5 million fund, which is almost fully invested; a second fund is being considered. Located in the Triad region in central North Carolina, the group is willing to consider any business with a tech component within a 200-mile radius. Last year members invested $265,000 in Optivia Medical, a Winston-Salem firm that is developing uterus-scanning devices. Often the group syndicates deals with members of other groups in the region, including Tri-State Investors Group, Charlotte Angel Partners, and Charleston Angel Partners. About 16-18 companies out of the 200 or so that apply each year make it through Flanders-Stec and the screening committee to present before the monthly members' meetings, resulting in two or three investments per year.

Imlay Investments
Atlanta
Founded 1990
Sig Mosley, President; John Imlay, Founder
Total amount invested: Undisclosed
Number of companies funded: 75-80
Who got money: Scentric

John Imlay made his fortune building an enterprise software company called Management Science America, which he sold to Dun & Bradstreet in 1990 for about $330 million. He hired Sig Mosley to manage his money; Mosely does angel investing in addition to running Imlay's stock portfolio. Imlay has no Web site, but Mosley is not hard to track down; he's plugged in to the network of attorneys and accountants that help get young Atlanta area tech companies off the ground. He usually invests in software and infrastructure companies. Right now he thinks data encryption is an overcrowded field, but data storage will keep growing. Last fall he joined with VCs and local angels in a $5.6 million first round for Scentric, an Atlanta firm that promises next-generation data storage solutions. One decidedly non-tech investment that has paid well: Imlay has a piece of the Atlanta Falcons football team.

Midwest

Indiana Venture Center/AngelNet
Indianapolis
www.indianaventurecenter.org
Founded: 2003
At least 200 angels statewide are looking at deals brought to their attention by IVC/AngelNet
Total amount invested: $3 million
Number of companies funded: 9
Who got money: VascAlert

Bruce Kidd started AngelNet in 2002 as a Web site designed to match up angels and entrepreneurs, but there was nothing to drive members of either party to the site. In 2003, non-profit Indiana Venture Center (IVC) was established to serve as a catalyst for the creation and growth of high-growth businesses in Indiana. Kidd went on staff and re-launched AngelNet as a part of IVC. Now Kidd is getting angel groups organized in cities around Indiana. Entrepreneurs can fill out a Business Profile on the site, and a "triage team" of 90 venture capitalists, securities and IP attorneys, bankers, CFOs, entrepreneurs and CEOs will inspect the submissions and help prepare their pitches before the most promising ones are sent out to likely angels. IVC even persuaded VascAlert, which was in Chicago, to move to West Lafayette, Ind., as it helped the firm raise $450,000. VascAlert, which makes monitoring software for dialysis, wasn't able to get the funding in Chicago.

Bob Geras
Chicago
(Read the full profile in the July 2005 issue of Inc. magazine)

Bill Weaver
Chicago
Angel Since: The late 1960s
Total amount invested: $3-5 million
Number of companies funded: 25-30
Who got money: CCC Information Services

When Inc. last wrote about Weaver, in 1991, about 400 deals came to him from all over the country, which he says was a big pain in the neck. He's a partner at Sachnoff & Weaver, a business practice law firm. The firm let him "play part-time venture capitalist" as long as it got the legal business from deals he'd arranged, which made sense, as it specialized in early-stage companies. In the '90s he had no problem raising $3 million in an afternoon, which was kind of unnerving. He's always co-invested with the players he rounds up, and estimates that he's raised $20-30 million for the firms he's invested in. Now he looks at about one deal a week. One hit: CCC Information Services, now publicly-traded. The firm provides estimates of used car values to insurance claims firms and collision repair services; the estimates are considered more accurate (and generally lower) than the old Blue Book system.

Steve Miller
Chicago
www.originventures.com
Angel Since: 1998
Total amount invested: More than $2 million
Number of companies funded: 10
Who got money: iNest

Miller's family started an office supply business, Quill, in 1956. The business was sold to Staples in 1998 for almost a billion dollars. Since then, Steve's been an angel. He's somewhat responsible for Quill's impressive sales price, having spearheaded the firm's Web business in the '90s. Much of his investing is done through Origin Ventures, which specializes in biotech and e-commerce. A good example of a successful investment is iNest, an online real estate agent for buyers of new homes that gives a 1% rebate to the buyer on completion of a deal. Origin invested in the company in 1999 and helped build the management team. It was sold to Lending Tree last November, and Miller says he made a significant multiple on his investment. Outside Origin and its focus, Miller has invested in a sports marketing firm.

Marquette University Golden Angels Network
Milwaukee
mukohlercenter.org
Founded: 2002
Members: 80
Total amount invested: $3 million
Number of companies funded: 4
Who got money: EMSystem

This young group is worth inclusion because its model shows promise and is likely to be replicated elsewhere: putting the resources of a university and an alumni network behind an angel group. Its director, Tim Keane, is the Entrepreneur in Residence at Marquette's College of Business Administration. The group consists of 80 angels in southeastern Wisconsin and northern Illinois; about two thirds are Marquette alumni. They're interested in any sort of business in the area, as long as the principals can articulate the size of their market and what they're going to do with more money to capture it. There are four live meetings per year over dinner, and, in an innovation unique to this list, eight more presentations are done via live webcast. Last year nine members gave support to EMSystem, which has a Web-based means of letting ambulance crews know what medical facilities are open and best suited to the emergency at hand.

Minnesota Investment Network
St. Paul, Minn.
www.mincorp.org
Founded: 1998
Members: 67
Total amount invested: $5 million
Number of companies funded: 20
Who got money: AbbeyMoor Medical

Minnesota Investment Network is a non-profit corporation with a $16.3 million equity fund dedicated to investing in manufacturing and technology companies in Minnesota. In addition, MINCorp has been establishing "RAIN funds," which organize angels locally as for-profit LLCs, and allow them to invest as they like -- locally, but also regionally and nationally according to their interest. So far six of these have been formed; two are fully invested. The local funds vote on all investments. Half the investments are in early-stage companies; the other half are to support ownership transition, keeping existing firms local. Several RAIN funds, MINCorp, and individual members have put in more than $1.5 million of the $10 million raised by AbbeyMoor, which makes a prosthetic stent for men with prostate problems. That money has helped AbbeyMoor stay in rural Minnesota, about 100 miles northwest of the Twin Cities.

Texas

Mike Maples Austin area
Angel since 1995
Total amount invested: Undisclosed
Number of companies funded: 54
Who got money: CM IT

Maples retired from Microsoft in 1995; since then he's become one of Texas's premier angels, operating out of his ranch about 50 miles west of Austin. Most of his investments are in areas close to his IT background -- a good example is CM IT, which changed its name from Computer Moms last year, a franchise operation that does onsite PC troubleshooting. These days Maples feels that traditional exits -- IPOs or buyouts by larger firms -- are becoming less likely, so he prefers to get a percentage of ongoing cash flow in return for his investment. He looks at five to 10 business plans a month, and will often meet with local firms he hasn't invested in just to give advice. He suspects the next big thing will be a software firm that figures out how to distribute its wares to small business -- and he'd like to get in on it.

West

Utah Angels
www.utahangels.org
Founded: 1997
Members: 13
Total amount invested: $14.6 million
Number of companies funded: 35
Who got money: Omniture, MyFamily.com

This group has no paid staff, and doesn't even admit to having a physical location. Among members' investments are two quirky Inc. 500 firms: Web site-effectiveness-gauger Omniture, and online-genealogy-tracker MyFamily.com. Including simultaneous and follow-on VC investments, the portfolio has raised more than $200 million. Entrepreneurs send executive summaries via e-mail to the member expert in their field, they're posted on a private members area on the Web site, and the group meets once a month to see presentations from those who have garnered sufficient interest. The group prefers companies that already have some revenue. Members invest on an individual basis; on average about five will commit to a deal, and often small Utah VCs will invest at the same time.

Northwest

Alliance of Angels
Seattle
www.allianceofangels.com
Founded: 1998
Members: 85
Total amount invested: $18.7 million
Number of companies funded: 68
Who got money: Pacific Bioscience Laboratories

The Alliance is an outgrowth of the Technology Alliance, a network of businesses, research institutions, and trade associations that Bill Gates Sr. got going in 1996. Two MBA students on staff screen all the applications submitted via the Web site, and about a third are passed on to a screening committee that sees ten-minute presentations, followed by Q&A. The best three or four get to go to the full members' meeting, which happens 10 times a year. Individual members make their own decisions. Last year 14 members invested more than $700,000 in Pacific Bioscience Laboratories, which has developed the Clarisonic Skin Care Brush, an electronic device that cleans the skin using oscillating brushes on sonic frequencies. No exit yet, but a follow-on round was valued at twice the share price AoA members got.

National

Investors' Circle
Brookline, Massachusetts
www.investorscircle.net
(Read the full profile in the July issue of Inc. magazine.)

Keiretsu Forum
San Francisco, Silicon Valley, Santa Monica, Westlake Village, Long Beach, Hawaii, Calgary, Chicago, and Boston
www.keiretsuforum.com
(Read the full profile in the July 2005 issue of Inc. magazine.)

First Round Capital
West Conschohocken, Pennsylvania
www.firstround.com, www.demo.com
Founded: October 2004
Two principals
Total amount invested: $2 million
Number of companies funded: 6
Who got money: TurnTide Systems (From Kopelman and Morgan, prior to founding of First Round)

Josh Kopelman founded Half.com, an online seller of used books, movies, and music that was sold to eBay. Howard Morgan was a founding investor in tech incubator Idealab. He has personally invested $30 million in more than a hundred companies. The two have joined to form First Round, a seed-stage VC that will only invest in companies that are scheduled to present at DEMO, a twice-a-year technology conference now in its fifteenth year. Interested companies should apply to present at DEMO; if they get accepted, they can then approach First Round, which expects to make investments of $250,000-$500,000 in eight to 10 companies scheduled to present at the September show, with follow-ons of a similar amount. The two directors have already taken ten firms through this process with successful outcomes, including anti-spam company TurnTide Systems, which in six months brought them a return of more than 500% on their $1 million investment last year when it was sold to Symantec.

Technology Tree Group
Houston
www.technology-tree.com
(Read the full profile in the July issue of Inc. magazine.)

Last updated: Jun 15, 2005




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